US Private Equity Firm KKR to Increase Investments in Japan Amid Yen Weakness and Attractive Stock Undervaluation

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] The U.S. private equity firm Kohlberg Kravis Roberts (KKR) plans to expand its investments in Japan, according to major foreign media reports on the 18th (local time). KKR intends to take advantage of the Japanese yen falling to its lowest level in 32 years to acquire Japanese assets at a low price. With Japanese corporate stock prices also declining, KKR sees this as an excellent opportunity to increase its investments in Japan.

KKR manages nearly $500 billion in assets, including an Asia-focused private equity fund worth $15 billion.

Henry McVey, Chief Investment Officer (CIO) responsible for $25 billion in assets at KKR, said in an interview with foreign media, "Investments in Japan will continue to increase," adding, "We will increase investments not only in private equity but also in real estate, infrastructure, and credit businesses."

He assessed, "Japanese stock prices have fallen to attractive levels, investors want to invest, and the Japanese economy is benefiting from the weak yen."

The yen has depreciated by more than 20% against the dollar this year, reaching its lowest level in 32 years. The Nikkei 225 index has also fallen about 5% this year.

KKR has steadily invested in Japan. After acquiring Panasonic's healthcare business in 2013, KKR took it public in 2021. This year, it acquired the real estate management company Mitsubishi-UBS Realty for $2 billion. It also holds stakes in the Japanese retailer Seiyu and semiconductor company Kokusai Electric.

Last summer, KKR suffered losses when the auto parts company Marelli entered bankruptcy protection. Marelli, an auto parts company acquired by KKR from Nissan, saw sales plummet during the COVID-19 pandemic.

Other private equity firms such as Bain Capital, Blackstone, Brookfield, and CVC have also recently increased their investments in Japan.

The rising geopolitical tensions between the West and China have further highlighted Japan as a relatively safe investment destination, which is another reason private equity firms are expanding their investments.

CIO McVey explained that the increase in overseas mergers and acquisitions (M&A) is a result of Japanese companies focusing on profitability and implementing structural reforms.

KKR is scheduled to announce its quarterly earnings on the 19th. CIO McVey recently mentioned the turmoil in the UK financial market and said that the Asian market's performance is expected to be better than that of major European markets.

This content was produced with the assistance of AI translation services.